Is BitCoin a cyberthreat?

Apr. 7, 2014 - 03:45AM
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Kevin Coleman is a senior fellow at SilverRhino and former chief strategist at Netscape. / File

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A new cyber threat has emerged, and it is called BitCoin. If you are not familiar with BitCoin, you are not alone. It was shocking to see just how many professionals are not aware of BitCoin and the challenges it poses. It all started back in November 2008 when a paper was published on the Internet that was titled, “Bitcoin: A Peer-to-Peer Electronic Cash System.” (Read the paper.)

BitCoin by its own account is an “innovative payment network and a new kind of money.” We have already seen online merchants add BitCoin to their secure methods of payment. Now here is where it becomes an interesting issue.

The Law Dictionary defines money as - A general, indefinite term for the measure and representative of value; currency; the circulating medium; cash. If the definition stopped after value that would be fine, but it didn’t. It went on to define currency as - coined money and such bank-notes or other paper money as are authorized by law and do in fact circulate from hand to hand as the medium of exchange.

BitCoin is notauthorized by law. Well, at least not yet. A key point/attraction of BitCoin is that no country/government owns or controls or can manipulate it! The inability of governments, intelligence agencies and law enforcement to control, track or trace it is very attractive feature for criminals, terrorists, activists and rogue nation states. You can be sure that this has some governments very concerned about this growing problem while others view it as a real threat.

In a recent conversation about BitCoin, the topic of virtual-states arose. A virtual state can be thought of as a highly nebulous distributed community of individuals that self-identify and share one or more social, political and/or ideological convictions, ideas or values. As a point of reference, many point to Anonymous as a virtual-state. What happens if or when one or more virtual-states select BitCoin as the mechanism of choice for the exchange of value?

Is BitCoin an electronic tool that can be used for criminal activity or to acquire illicit goods like cyber weapons or to pay for malicious services like cyber attacks? Due to its anonymity, can BitCoin further enable the escalation of attacks in cyber space or is that already taking place? One thing is certain, BitCoin adds just another layer of complexity in tracking funding for the acquisition of cyber weapons or the purchase of cyber attacks.